A video encoder system includes a base layer and an enhancement layer for encoding video data. The base layer encodes a reduced quality version of the video data to obtain base layer data. The enhancement layer encodes the video data using energy-concentrating transform operations, nested scalar quantization, and Raptor encoders. The base layer data and enhancement layer data are transmitted through a channel to a video decoder system. The decoder system decodes the base layer data to recover an estimate of the reduced quality video and decodes the enhancement layer data (using the reduced quality video as side information) to obtain blocks of coset indices. The decoder system then operates on the blocks of coset indices to generate estimates of the original video data.